Last week, we discussed the fact that medical debt has become a leading cause of bankruptcy in Florida and throughout the U.S. The Centers for Disease Control and Prevention has now reported that more than one-quarter of American families struggled to pay their medical bills in 2012. The CDC found that whether Americans have health insurance or not, medical expenses can lead to overwhelming debt. And, the problem may be the greatest for families with children; one third of those with children had trouble with medical bills in 2012.
This report is a reminder that when a Florida resident suffers an unexpected serious illness or injury, the damage is often far beyond pain and suffering. Medical care often results in mounting bills that cause serious financial distress. Floridians may end up pulling money out of their retirement funds and or even losing their homes as a consequence of an expensive medical condition.
Florida residents who are unable to pay their medical bills, or who are racking up credit card debt and going without basic needs in order to make those payments, need to be aware that viable debt relief options may exist.
Medical debt is generally unsecured debt. This means that medical debt is not secured by a piece of property. Mortgages and car loans, on the contrary, are secured debts. This means that medical debt can typically be discharged with a Chapter 7 bankruptcy filing.
In Chapter 7 bankruptcy, all of a filer’s dischargeable debts are forgiven. And, while many Orlando residents might assume that those who file for Chapter 7 bankruptcy protection have to surrender their assets, many assets are actually exempt from bankruptcy, meaning the filer is allowed to keep many pieces of personal property.
Those who are considering Chapter 7 bankruptcy as a way to resolve their medical debts should talk to a reputable bankruptcy attorney to help ensure that this is the best solution for them.
Source: CBS News, “More than one-fourth of American families faced financial burden due to medical costs,” Michelle Castillo, Jan. 29, 2014